I lost out on a transaction with one of my clients the other day; but I think they made the right choice by not refinancing with me.
I had financed a spec home for them near Lake Chelan which has not sold. I was in the process of refinancing it into an investment property on a 30 year fixed loan. These days Fannie Mae adds all kinds of extra fees for investment properties, and less than perfect FICO scores etc. They weren't taking any cash out, and the loan is less than 60% of the current appraised value, but it was still going to cost them about $10,000 in fees to get a 6% loan.
The owner called me and said that a freind was looking for a good investment that was safer than the stock market and returned better than CDs, so she asked if she could pay off my client's mortgage and have my client pay her 6% interest.
So the friend gets a safe 6% return on her investment, which beats the stock market by about 50%, and my client gets her new loan without the Fannie Mae loan fees.
Of course, I'm out a nice commission on a $417,000 loan, but I couldn't argue with the logic, and encouraged my client to take advantage of a great opportunity.
When people are lining up for 0% interest on 3 month Treasuries, a mortgage on a trusted friend's property, at a safe loan-to-value, looks pretty good.
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